(FORTUNE Magazine) – Tumult in the Middle East has cast a pall over the stock and bond markets but lit a fire under anything associated with oil. Shares of the big oil producers were the first thing most investors bought. But with oil stocks now sharply higher, it may be time to consider more exotic plays on crude, including options, futures, oil trusts, even secondhand oil and gas partnerships. The securities are tricky and far riskier than stocks. But as leveraged bets they offer the potential for enormous gains. For those who expect oil prices to keep climbing, or even to fall precipitously, a roll of the dice at the oil options and futures pits of the New York Mercantile Exchange could pay off handsomely. Even if you're not the gambling type, a small bet on higher oil prices could actually lower the risk of your portfolio, since the price of petroleum has lately tended to move inversely to stocks and bonds. One popular strategy: If you think the price of oil is headed up to $29 or more, buy a ''November $27'' call option on crude oil, which recently sold for $1,850. Unlike stock options, which provide a direct call on the underlying stock, oil options give the holder a call on the futures market because that's where the commodity is most actively traded. Even so, the net result is the right to buy 1,000 barrels of crude at a guaranteed price, in this case $27 per barrel.

If oil rises to $28.85 per barrel before the November $27 option expires in mid-October, you will cover your costs and begin turning a profit (see chart). Similar strategies can be implemented using options on heating oil and gasoline contracts, but crude is the best bet because the market is more actively traded. Currently, crude oil options can be bought with expirations as far out as July 1991. For those with a longer time horizon, Salomon Brothers plans to introduce a five-year oil trust. The trust units, which will sell for $4 to $5 apiece and trade on the American Stock Exchange, will entitle holders to the price equivalent of one-quarter barrel of oil in September 1995. If the units sell for $4.50 and in five years oil fetches, say, $28 per barrel, the trust units will return about 9% annually. If oil's price should rise to $35 per barrel, the investor's annual return would jump to roughly 14%. Those who foresee a quick end to the Middle East crisis might want to wager that crude prices will drop. Buying a November $26 put option gives you the right to sell 1,000 barrels of oil at $26. Hence, if oil falls below that price, you stand to profit. The put option recently sold for $1,600, so oil's price would have to fall below $24.40 per barrel to cover the price of the put. From that point, you'll make roughly $1,000 for every dollar the price of oil drops. Futures contracts are cheaper than options but more risky. Since options are only a right but not an obligation to buy or sell, losses are limited to the money you shell out for the option. But futures confer ownership of the underlying commodity, so the potential for gain or loss is virtually % unlimited. If you buy a November futures contract for oil at $27 a barrel and the price falls to $17, you lose the difference times $1,000, or $10,000. However, if oil rises to $30 a barrel you will reap $3,000, nearly three times as much as the gain from the option. Options and futures prices change like the wind, so consult an experienced broker before you buy. Another promising play on oil is the secondary market for oil and gas limited partnerships. Partnership units used to be illiquid, if you bought one you were stuck with it. But in recent years several outfits have made markets brokering units. Though typically a slow business, trading in oil and gas partnerships has picked up since the jump in energy prices. Paul Williams, a broker with G.K. Scott in Boca Raton, Florida, who has dealt extensively in used partnership units, says investors who sell their interests -- typically individuals who bought in looking for a tax shelter -- often don't understand what they are selling. Moreover, many sellers are hungry for cash and frustrated by the poor returns from their partnerships in recent years. To get at least some of their money back, they frequently sell their interests at astounding discounts from the appraised value. Estates and other quick sellers may unload units at 20 to 30 cents on the dollar. Though the tax benefits of the units have typically been used up by the first owner, these orphans can be attractive income producers at such low prices. Take care, however, to evaluate the partnership units before buying. Investors interested in partnerships can check with the National Partnership Exchange in Tampa, which auctions off units to the highest bidder. The exchange's telephone number is 800-356-2739. Sellers will often provide prospective buyers with the disclosure forms that the partnership has filed with the Securities and Exchange Commission. If they don't, call the SEC and order them yourself before you buy. Better still, buy through a reputable broker who can do the legwork and provide evaluations on the partnership interests.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: A CALL ON HIGHER OIL PRICES